Pendency of case before Addl. CMM can’t be a reason to transfer of assessee’s case to another State: HC

Case Details: Divesh Prakashchand Jain v. PCIT - [2022] 134 taxmann.com 93 (Bombay)

Judiciary  and Counsel Details

• • K.R. Shriram and Amit B. Borkar, JJ.
  • Devendra H. Jain for the Petitioner. 
  • Suresh Kumar and M.J. Babu for the Respond

Facts of the Case

The assessee was a partner in a firm-S. S. Jewellery was engaged in the manufacture and sale of gold ornaments. It has a principal place of business in Mumbai, and the firm had a branch in Bengaluru.

During the course of its business, the firm sent samples, jewellery, etc., to Bengaluru to be displayed to potential customers. On 20-11-2020, 2 employees of the assessee’s firm were intercepted by the Bengaluru Police, and 6055.23 grams of gold jewellery belonging to the firm was found.

Investigations commenced, and a case before the Additional Chief Metropolitan Magistrate (Addl. CMM) was pending. The DDIT (Investigation), Bengaluru, was a Respondent in that case before the learned Addl. CMM.

A notice was issued to the assessee to show cause as to why his case should not be transferred to Bengaluru for completing the assessment proceedings. The assessee filed the reply, but his objections were rejected, and the transferred order was passed. Assessee filed a writ petition before the Bombay High Court.

High Court Held

The Bombay High Court held that there was no doubt that the assessee was served a show-cause notice, and the personal hearing was also granted before passing the order. However, the reasons recorded in the order are certainly subject to judicial scrutiny and must be reasonable.

However, the revenue had only narrated the facts without giving reasons as to why the assessee’s case was transferred to Bengaluru, considering the facts and circumstances of the case. Assessee is assessed in Mumbai, and the firm of which assessee is a partner is also assessed in Mumbai. Mere because a case was pending before the Addl. CMM cannot be accepted as a reason for the transfer of assessee’s from Mumbai to Bengaluru.